In comments filed May 29 with the New York State Public Service Commission (PSC), business, environmental and citizen groups jointly called for cleaner solutions to replace the old Dunkirk and Cayuga coal plants.
The PSC is currently deciding whether to approve a costly repowering of the plants or replace the small amount of power generated with transmission upgrades. The plant owners primarily want to repower the plants with natural gas, while the local grid owners tend to prefer transmission system upgrades. The groups argue that the commission should investigate other solutions, including energy efficiency, renewables and demand response as cleaner and cheaper options.
Said Heather Briccetti, President and CEO of The Business Council of New York State: “The Commission should reject the current repowering proposals which runs counter to New York’s now dynamic and competitive energy market where capital costs and associated risks for conventional projects are borne by the developer, not by the ratepayer. Energy market forces and design, have already provided New York consumers with cleaner, more reliable generation, and historically lower wholesale electricity costs.”
“We can’t afford to sink more money into dirty coal of the past. The potential retirement of these coal plants is an opportunity to invest in a healthier future for our kids that we can’t miss out on. Upstate New York has tremendous potential for clean, renewable energy like wind, solar and efficiency that together could cut energy demand, lower electricity prices, create jobs and clean up the air we all breathe,” said Lisa Dix, Senior New York Representative for the Sierra Club.
The Business Council of New York State, the Sierra Club, ACE NY, Earthjustice, Vote Solar Initiative, Citizens Campaign for the Environment, Environmental Advocates of New York and Northeast Energy Efficiency Partnership (NEEP) filed joint comments in this case.
The groups said in their comments that the commission should recognize that New York now has a dynamic and competitive energy market where capital costs and associated risks for conventional projects are borne directly by private developers, rather than through public subsidies.
“It is important to note the market is explicitly structured so as to provide price signals for new conventional generation construction, repowering and continued operations, where such actions are cost-effective and appropriate to maintain reliability,” they added. “For instance, a look at the recent New York Control Area’s May 2013 Spot Market prices ($5.76 per kilowatt-month) versus those in May 2012 ($2.91 per kilowatt-month) reveals that capacity prices have increased substantially and, if these prices hold for the remainder of the summer capability period, the market will be sending a collective price signal that a generator could obtain roughly $3.4-million of value for every 100 megawatts of capacity for the summer capability period alone. This example illustrates that this market should be allowed to work—as opposed to undercutting those market signals with the out of market repowering payments being considered in this proceeding. Indeed, with pricing signals like these, it appears neither efficient nor appropriate to provide old and inefficient generators an unnecessary, out-of-market contract that will be funded by ratepayers.”
Owners of Cayuga and Dunkirk have laid out various repowering options
Cayuga Operating as part of this proceeding has offered four possible options for its Cayuga plant:
- Option 1 – would repower the two existing coal-fired boilers with natural gas while continuing to utilize the balance of the existing plant facilities to generate electricity. The maximum output of Option 1 is 300 MW. The existing Cayuga facility entered commercial operation in the 1950s and exists today as two units with a total site output of 300 MW (net).
- Option 2 – would repower Cayuga with simple-cycle combustion turbine generators firing only natural gas. Option 2 proposes three new General Electric LMS100 simple-cycle combustion turbines with a maximum combined output of 294 MW.
- Option 3 – is to repower the Cayuga Unit 2 with a combined-cycle combustion turbine generator, a heat recovery steam generator (HRSG) and a condensing-cycle steam turbine generator. The objective of Option 3, like each of the preceding options, is to supply a nominal 300 MW to the grid on a high-reliability basis. This option also includes a fuel switch to natural gas on the existing Cayuga Unit 1.
- Option 4 – proposes two new combined-cycle combustion turbine generator trains with a maximum output of 326 MW.
NRG Energy (NYSE: NRG) has offered three options for Dunkirk:
- Option 1—a new 422 MW combined-cycle gas turbine (CCGT) and refueling of the existing 75-MW Dunkirk unit 2 with natural gas.
- Option 2—the refueling of the existing Dunkirk units 2, 3 and 4 with natural gas.
- Option 3—installation of 285 MW of natural gas-fired peaking units.